Mt. Diablo Unified School District Second Interim Budget Report March 9, 2010 Steven Lawrence, Ph.D., Superintendent Bryan Richards, Director, Fiscal Services

Why an Interim Report? Ed. Code §42130 requires the Board to certify two interim budget and financial reports Certification is either Positive, Qualified or Negative Positive – The district will meet its obligations for 3 years Qualified – The district may not meet its obligations for 3 years Negative – The district will not meet its obligations in current or upcoming year 1st Interim with transactions to October 31 due December 15 2nd Interim with transactions to January 31 due March 15 If 2nd Interim qualified or negative, 3rd Interim with transactions through April 30 due June 1

Unrestricted General Fund Revenue Revenue Limit Sources $ 158,651,759 Federal Revenue 225,054 Other State Revenue 32,074,592 Other Local Revenue 3,168,461 Total Revenue 194,119,866 Less: Net Contrib. to RGF (34,730,797) Net Available Revenue $ 159,389,069

Revenue Limit is down from 89. 8% of revenue to 81 Revenue Limit is down from 89.8% of revenue to 81.73% because of the deficit.

Unrestricted General Fund Expenditures Certificated Salaries $ 83,414,261 Classified Salaries 19,886,215 Employee Benefits 29,936,365 Books & Supplies 6,241,695 Services & Operating 15,089,883 Capital Outlay 108,113 Other Outgo 929,381 Interfund Transfers Out 5,452,658 Total Expenditures 161,058,571

Salaries and Benefits make up 82.73% of expenditures & transfers out

Unrestricted General Fund Summary Net Available Revenue $ 159,389,069 Net Expenditures 161,038,571 Net (decrease) fund bal. ( 1,669,502) Beginning Balance, July 1 24,529,701 Projected Ending Balance $ 22,860,199

Components of Ending Balance Revolving Cash $ 300,000 Stores Inventory 536,118 Economic Uncertainties (2%) 6,036,482 IRS Assessment Resolution 533,550 Tier 3 and Site Carryovers 7,165,062 Undesignated 8,288,987 Ending Balance $ 22,860,199

Restricted General Fund Revenue Revenue Limit Sources $ 6,614,982 Federal Revenue 31,892,737 Other State Revenue 37,774,770 Other Local Revenue 8,841,354 Interfund Transfers In 0 Net Contribution from UGF 35,525,361 Total Revenue $120,649,204

Restricted General Fund Expenditures Certificated Salaries $ 44,454,133 Classified Salaries 21,644,156 Employee Benefits 24,982,365 Books & Supplies 25,374,487 Services & Other Operating 22,256,480 Capital Outlay 343,427 Other Outgo 2,505,016 Transfers Out 0 Total Expenditures $ 141,560,064

Restricted General Fund Summary Total Revenue $ 120,649,204 Total Expenditures 141,560,064 Net (decrease) in fund bal. (20,910,860) Beginning Balance, July 1 22,687,425 Projected Ending Balance $ 1,776,565

Other Funds of the District Funds for special purposes excluded from the General Fund Special Revenue Funds Charter School – Form 09I Adult Education – Form 11I Cafeteria – Form 13I Deferred Maintenance – Form 14I Capital Projects Funds Building (Proceeds of local bonds for construction) – Form 21I Capital Facilities (a.k.a. Developer Fees) – Form 25I

Other Funds of the District (cont’d) Capital Projects Funds (continued) County School Facilities (State Allocations for construction) – Form 35I Capital Project for Blended Component Units (Mello-Roos) – Form 49I Debt Service Funds Bond Interest and Redemption – Form 51I Debt Service for Blended Component Units (Mello-Roos) – Form 52I Foundation Private-Purpose Trust Fund (Scholarship Fund) – Form 73I All “Other Funds” projecting positive fund balances

Supplemental Information Form AI: Average Daily Attendance decrease of (719.95) in 09/10 will decrease funding for 10/11. Form CASH: Cash Flow – to end year positive we sold a $12M TRAN which closes on March 18 and are pulling LAIF into County Treasury Form RLI: This is unchanged since 1st interim except for the adjustment to PERS reduction due to personnel cost changes Form 01CSI: Criteria & Standards Form CI: Certification to Sign summarizes Criteria & Standards Form MYPI: Multi-year Projection – What we can expect based on what we know now from Sacramento, so it’s time for another episode of…

STATE CAPITOL

One time revenue limit deficit now ongoing! This year we have a one-time additional deficit of $252.83 per 2008-09 FUNDED ADA (2007-08 actual P-2 ADA) or about $254.06 per current funded ADA Starting next year it will become ongoing and be $201 per current year funded ADA This deficit is proposed to be applied to “administrative” costs. While “administrative” is undefined in the proposal, current chatter from Sacramento indicates it will be calculated on function codes 2100-2199 (instructional supervision), 7000-7999 (central administration and technology) and 8000-8999 (maintenance, operations & security). Reductions since 2008/09 will count towards the cuts as it will be used as the base year. However, reductions from 2007/08 into 2008/09 may not. This is not yet finalized and there is a move to strip the language from the proposal.

General Outlook for the Future Positive Certification (we will meet our obligations for this year and the next two) This certification is conditional on the board’s approval of items on tonight’s cut list as they have been included in the multi-year projection Concerns State fiscal health is still precarious although January revenues were up in the first piece of good news out of the State in a while. However, it hasn’t made up for the shortfalls to date so the May revise may still have further cuts. Health care cost containment is critical. Increases have been coming in well above the CPI. Our 2011 rate announcement comes from CalPERS in June. Declining enrollment – still a major concern DEFICIT – The cuts have significantly lessened our deficit spending. However, cash is king and we must continue to monitor it. We will be pulling our LAIF investment into the County treasury to be sure cash is available.

Cash is king for the State too! Additional new deferrals will affect our cash flow substantially! July revenue limit deferred until September October revenue limit deferred until January March revenue limit deferred until April 29 Our TRAN payments are in July and August with a final due date of October 1 We plan to issue next year’s TRAN in October to be ahead of the second deferral

The 09/10 revenue limit cut $1,423/ADA

Form MYPI: Multi Year Projection Undesignated + Tier 3 @ 6/10 $ 8,288,987 Operating Deficit 2010/11 ( 2,544,379) Adjustment in 2% reserve 709,906 Unappropriated Balance 6/11 6,454,514 Operating Deficit 2011/12 ( 1,391,915) Adjustment in 2% reserve 10,373 Unappropriated Balance 6/12 $ 5,072,972

Cuts substantially curtail the deficit Unappropriated Balance 6/12 $ 5,072,972 Deficit & Rsv Adj - 2012/13 ($ 1,163,673) Unappropriated Balance 6/13 $ 3,909,299 Deficit & Rsv Adj - 2013/14 ($ 3,580,926) Unappropriated Balance 6/14 $ 328,373 2013/14 sees the end of flexibility unless legislation is passed to continue it

What next? We go back to Sacramento State budget talks underway in legislature March Government Price Index establishes 2010/11 COLA April tax receipts tell the State’s fiscal tale Governor’s May Revise

Thank you. Tune in next time for the next episode of… STATE CAPITOL